Friday, May 21, 2010

Fault lined “No-Faults” May Create Liability for Attendance Conscious Employers

If you have the pleasure of working in manufacturing, construction and other industries where unplanned absences have an immediate and direct impact on production and the bottom line, you are probably familiar with a “no-fault” attendance point policy. This is a policy where there are no excused or unexcused absences. All absences (except those that are specifically excluded by company policy, state or federal laws) count against an employee. That is, “No one wants to hear about whose fault it is that you can’t be at work today.” Employee absences are tracked based on the number of occurrences of absence or tardy, often via a point system. For example, an absence that is called in ahead of time will cause the employee to get 1 point. A tardy will cause an employee a 1/2 point. An absence without a call in is a “no-show” and that may cause an employee to get 2 points. Progressive discipline is provided when employees reach or exceed specific points. For example, disciplinary actions could be taken if an employee earned the relevant points within a 12-month period. If an employee has 7 points within a 12 month period, he or she receives a verbal warning. After 9 points, he or she receives a written warning and so on until the employee reaches the maximum allowable points, causing termination.

Although rigid, these attendance policies are favored by production centered industries because they allow companies to maintain staffing needs and quickly warn employees who have excessive attendance or lateness that directly undermines productivity. Because the attendance is usually administered by a computerized system or software, it also helps insulate production supervisors from being accused of “targeting” these employees for discriminatory reasons. Once an employee reaches the maximum allowable points, he or she has been sufficiently disciplined for his or her absences and warned of imminent termination. Thereby, undermining any post termination claim of discrimination or wrongful termination.

Since they are not exactly pro-employee, these no fault attendance policies are often criticized for their rigidity, for discouraging employees from staying home when they are “fluey” but not wanting or needing to go to the doctor (as was the case when the H1N1 virus began its outbreak), for being unfair to women who are often the parent to stay home to care for the unpredictable needs of small children or the elderly (the criticism Wal-Mart came under recently for instituting a point attendance policy) and for not allowing leeway for unplanned emergencies, such as car accidents, among other reasons.

Notwithstanding these criticisms, when applied consistently, fairly and objectively, the “no-fault” attendance point system is generally upheld by courts when challenged. The problems or “fault-lines” emerge when individual managers, human resource personnel or sometimes even company counsel mistakenly do not properly identify the tardiness or absence as within statutorily protected leaves. That is, an employee receives points when their absence should not have counted as an “occurrence” and they are disciplined or terminated while protected under the Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), the Americans with Disabilities Act (ADA) or California’s Fair Employment in Housing Act (FEHA).

For example, in Roby v. McKesson Corp., No. S149752 (Nov. 30, 2009) the California Supreme Court reviewed a case that involved the McKesson Corporation’s wrong decision to deny one of its employees FMLA and terminated her when she reached the maximum points under the Company’s no fault attendance policy. In this case, Charlene J. Roby was a 25 year employee of McKesson Corporation, a distributor of pharmaceuticals and health care products. At the end of her employment, Ms. Roby was a customer service liaison at McKesson Corp. In 1997, Ms. Roby began experiencing panic attacks. This restricted her ability to perform her job as she would have heart palpitations, shortness of breath, dizziness, trembling and excessive sweating. She began a medication for the panic attacks, but one side effect of the medication was unusual body odor. Her panic disorder also caused her to nervously dig her fingernails into her skin and this caused scabs and sores. Her supervisor, knew about her panic disorder, her body odor and skin condition. Her supervisor called Ms. Roby “disgusting” because of the scabs and odor, she refused to acknowledge her greetings, turned away when Ms. Roby asked her questions, ignored her in meetings and called Ms. Roby’s job a “no-brainer.” Ms. Roby’s condition caused excessive absences. Although she requested FMLA, she was denied it by the company. In 2000, she was terminated based on these excessive absences pursuant to the recently instituted no fault attendance policy.

After her termination, Ms. Roby was “devastated,” depleted her savings and became suicidal. Ms. Roby sued McKesson Corp. and her supervisor personally for harassment and discrimination based on her disability. The jury sympathized with Ms. Roby and gave her a very generous verdict: $1.3 million in lost earnings, between $500,000 and $2 million for emotional distress, including $500,000 against the supervisor as an individual and $15 million in punitive damages. The Supreme Court reduced this amount to $1,900,000.

Although McKesson Corp.’s no fault attendance policy was designed to protect the company and its supervisors from claims such as Ms. Roby’s, when implemented with complete disregard for Ms. Roby’s ongoing medical issue, compounded with her supervisor’s personal attacks, it in fact created the opposite effect: both company and personal liability.

Proactive Lawsuit Prevention Strategies for No-Fault Attendance Policies
1) Train Your Managers.

All managers and human resources must be trained that employees with known or suspected disabilities and medical conditions may be protected by state and federal laws. They must be trained on the nuances between FMLA and CFRA, between ADA and FEHA. This may mean that the employee needs a special accommodation, time off, allowance for tardiness or is an exception from the attendance policy point system all together. This training should cover what a supervisor can ask for in terms of medical documentation and personal information. Moreover, all supervisors and managers must never make personal attacks, comments or criticism with respect to an employee’s disability or condition, verbally or in writing.

2) Institute Pro-Employee Benefits

A company with a no fault attendance policy can compensate for the rigidity of this policy by rewarding employees for perfect attendance, recognizing exemplary employees in company newsletters or intranet, by providing paid time off, paid sick leave, paid vacation benefits or rolling holidays. All of these would kick in before the points began to be counted against the employee.

3) Apply the Policy Fairly

Managers and human resource personnel must understand that the policy cannot be used to terminate disfavored or “problem” employees and ignored when the employee is someone they would like to keep. In Carmona v. Southwest Airlines, 5th Cir., No. 08-51175 (April 22, 2010), the 5th Circuit recognized that Southwest Airlines allowed some of its flight attendants to maintain employment even after reaching the maximum points under Southwest’s no fault attendance policy. Therefore, the Company’s decision to terminate one flight attendant, Carmona, for reaching maximum points was a “pretext” for his manager’s true discriminatory intent against Carmona’s for being disabled, which violated the ADA.